LAM013-NedSense Jaarverslag 2010 · tober 2010. Close partnerships with launching customers Rubelli and Donghia continued to result in innovations for the product, as did our adoption

2010ANNuAl REPoRT

NEDSENSE ENTERPRISES NV ANNuAl REPoRT 2010

P002

2010

ANNuAl REPoRT 2010 NEDSENSE ENTERPRISES NV

P003

Contents001 Message from the CEo P004

002 Key figures P006

003 Profile P008

004 Composition of the Boards P016

005 Report of the Board of Directors P018

006 Report of the Supervisory Board P028

007 Corporate Governance P040

008 Shareholders Information P048

009 Risk & control P052

010 Management statement P056

011 Financial statements 2010 P058

012 other information P138

NedSense enterprises n.v.

Ir. D.S. Tuijnmanweg 10, 4131 PN Vianen, The Netherlands

P.O. Box 151, 4130 ED Vianen, The Netherlands

Telephone +31 347 329 755, Fax +31 347 329 736

Email [email protected], Internet www.nedsense.com

Trade register Utrecht Chamber of Commerce under number 23092326

001 Message from the CEO


P004

001 Message from the CEODear Stakeholder,

The past year has been stimulating and inspi-

ring as we built on the strong foundations laid

for NedSense enterprises n.v. When the name

change from Blue Fox Enterprises to Ned-

Sense enterprise n.v. legally came into force

in January 2010, we were already benefiting

from a more pro-active and vigorous company

mentality. The organizational change that took

place in 2009 creating a flatter and more effec-

tive company continued further in 2010. We

have succeeded in smoothly separating pro-

duct management, where our intellectual pro-

perty lies, and product development, enabling

us to more finely customize our products, and

accelerate time to market. What’s more, a

capital injection in June 2010 created by the

emission of new shares and the renegotiation

of the financers’ loan have strengthened our

working capital and enabled us to continue

investing in the LOFT™ innovation.

The overall strategy for 2010 concerned the

third phase of the value triangle business plan

in which we aim to expand within and beyond

our current markets, and invent, dictate and

define the direction in which we are going. My

move as NedSense CEO to the United States

brought me closer to our operations there, and

I am proud of the success we have attained

in the American markets. Not only has our

market share increased strongly, but the Ned-

Sense subsidiary Dynamic Perspectives Inc.

has undergone a turnaround that has brought

new focus and energy to the company. New

alliances, a broader client base and positive fi-

nancial results are just a few of its successes.

In the second quarter of 2010, LOFT™ be-

came a reality. Its launch was celebrated in a

successful event in November 2010 in the Uni-

ted States, although we had already obtained

our first order in the American market in Oc-

tober 2010. Close partnerships with launching

customers Rubelli and Donghia continued to

result in innovations for the product, as did our

adoption of the Apple platform.

We have achieved the goals we set for oursel-

ves in 2010 and are proud that the profitability

of NedGraphics and DPI has provided support

for investments in the newly founded LOFT™.

We can boast that NedSense enterprises n.v.

has realized a break-even result at the end of

2010, excluding additional investments in the

We have achieved the goals we set for ourselves in 2010


P005

LOFT™ product suite. Our knowledge heri-

tage remains a vital element in our continuing

growth, and we are confident we can streng-

then our current markets and firmly root in new

markets so as to realize a positive EBIT in 2011.

The single strategy that is in place across all

of the NedSense companies provides the

strength to build further. NedSense enterpri-

ses n.v. is a stable company and in the coming

period we aim to evolve a more aggressive

nature for promoting further growth.

On behalf of the Board of Directors, I would

like to thank our shareholders for their com-

mitment. Their constant efforts and trust are

of great value to us as we enter into our next

stage of development. We would also like to

thank our clients, business partners, Supervi-

sory Board and employees for their contribu-

tions and loyalty. We are looking forward to

continuing fruitful relationships and exploring

new alliances.

Vianen, April 25, 2011

Pieter Aarts, Chief Executive Officer

Our knowledge heritage remains a vital element in our continuing growth


002 Key fi gures 2010 2009

Results from continued operations (in thousands of euros) Net revenue 9,518 8,123

Operating result (360) (1,574)

Net result (733) (1,680)

Cash fl ow 305 (973)

Employees (in FTE’s) Average number of staff in continued operations,

including staff hired out 114 112

Balance sheet information (in thousands of euros) Balance sheet total 13,896 12,674

Shareholders’ equity 5,125 4,316

Guarantee capital 5,125 4,316

Ratios (in %) Operating result / net revenue (3.8) (19.4)

Net result / net revenue (7.7) (20.7)

Solvency (based on guarantee capital) 36.9 34.1

Liquidity 1.6 1.0

Figures per share (amounts in euros) Average number of shares outstanding 11,711,485 7,884,917

Result per share (0.06) (0.21)

Cash fl ow per share 0.03 (0.12)

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P008NEDSENSE ENTERPRISES NV ANNuAl REPoRT 2010

003 Profi le

P009ANNuAl REPoRT 2010 NEDSENSE ENTERPRISES NV


003 Profi leour profi leNedSense enterprises n.v. is a global provider

of high-quality software solutions and services

for manufacturers and designers of the

products, designs and brands which surround

us in our day-to-day lives, from fashion items

and accessories to carpets and other woven

materials.

The NedSense portfolio ranges from market

leading CAD CAM technology to the recently

announced LOFT™ platform. Our aim is to

offer solutions that make sense and create

tangible value to the commercial activities of

existing and new customers.

History NedSense was founded as Blue Fox in early

1999 and has been listed on NYSE Euronext

Amsterdam NV since 21 May 1999. The

company grew rapidly as a result of its buy-

and-build strategy until it encountered fi nancial

challenges in 2006. As a means of thwarting

these challenges, the company initiated a new

strategic direction and disposed of non-core

activities. In 2009, Blue Fox underwent a

complete transformation program to prepare

the company, and our market, for a new era as

NedSense.

Current situationNedSense enterprises n.v. serves more than

3,500 customers through a global network

of over 42 resellers and agents. Its 14 offi ces

are ideally located in the leading textile,

fashion and production centers of the world.

It is organized into three operating divisions,

namely NedGraphics, LOFT, and Dynamics

Perspective.

NedSense enterprises n.v. came into force in

January 2010 following a name change from

Blue Fox Enterprises N.V.. In the two years

previous, a major organizational and cultural

transformation had taken place to create an

innovative, networked, international software

company. Volume-driven business models and

short development cycles aim to generate

a creative environment which fosters new

initiatives. These initiatives are supported by

NEDGRAPHICS DYNAMICS PERSPECTIVE

NEDSENSE ENTERPRISES N.V.

LOFT


the input from partner knowledge institutions

and an ambassador network that recommends

our products to the market.

At the end of 2010, the NedSense enterprises

n.v. organizational structure had evolved

from that of a set of separate entities to a

group of collaborating business units each

with their own products and services but

serving the same target market, namely the

Fashion, Textile, Retail and Interior industry.

Our sales and go-to-market strategy, and

our innovation and product development

processes are applied and managed company

wide so as to attain maximum synergy

between the business units. Our strategies

and processes remain flexible in order to be

able to respond to trends in our industry.

At present, NedSense enterprises n.v. and

its business units aim to meet the current

global trends by increasing speed-to-market

for our customers, developing the market

for product experiences which merge reality

with virtuality, and recognizing the rise of

emerging markets.

Our mission

In today’s experience economy,

customer experiences are transformed

when reality transcends into virtuality

and back into reality. It is this

transformation that creates economic

value for designers, producers,

retailers, resellers and consumers.

NedSense is cultivating a leading role

in providing innovative IT solutions that

orchestrate these experiences for its

customers.

Our mission is to provide solutions that

make sense and create tangible value

to the commercial activities of our

customers, leveraging our key assets

in combination with today’s market

and technology innovations. We aim to

become the expert and a global leader

in our markets offering state-of-the art

technology and solutions.


Our divisions

NedGraphicsNedGraphics forms our core business entity

delivering CAD CAM software solutions to the

fashion and textile industry and leading the

innovation program by continually investing

in highly qualified staff, market research, and

product development.

NedGraphics has over 30 years of experience

in developing, marketing and supporting the

leading CAD CAM software for thousands of

companies. Our products are seen as A-brand

in the market because of their continuous

innovativeness, optimal functionality and

broad applicability. They enable our clients to

improve their sales through minimizing time to

market, optimizing product development flow,

and reducing sampling costs. Each software

solution is offered in a fully integrated modular

system to guarantee current and future

operational performance.

NedGraphics’ integrated software solutions

are used around the world in three main

market segments:

• Fashion design

• Floor coverings

• Home furnishings

In all segments, the NedGraphics software

actively supports customers throughout the

entire textile value chain, from freelance

designers to large-scale production facilities

and from yarn manufacturing to weaving and

pattern.

loFTLOFT is our most innovative and emergent

subsidiary. The LOFT™ suite of products

currently provide an online sales tool for

designers and manufacturers in the textile and

apparel industry, enabling them to co-create

personalized virtual showrooms

with their customers. The products

help create an engaging online

showroom experience at any

time, reduce sampling costs, and

accelerate the purchase decision

time.

LOFT was formed in the first quarter of

2010 to take on the development and sales

of the LOFT™ suite of products. Until then,

the research and development of LOFT™

products had come under the responsibility

of NedGraphics. Ideas for LOFT™ had initially

been sparked in 2009 and had rapidly taken

form although they were clearly innovative and

represented unfamiliar territory for NedSense.

A working prototype was available by the end

of the year 2009, and a LOFT™ launching

customer program was created in which

NedSense customers could commit to the

Solutions that make sense and create tangible value


Andrea Favaretto Rubelli, CEo of Donghia uS and Rubelli:

“�We�have�been�looking�for�a�tool�like�LOFT™�for�the�past�ten�years.�We�found�that�only�NedSense�has�the�experience�needed�to�simulate�our�fabrics�on�screen��in�the�appropriate�way.”

project and work with us in developing the

LOFT™ products by sharing their functional

requirements. These market demands were

key to setting the priorities for research and

the LOFT™ functionality.

The specialized research and development

team at LOFT continues to work closely

with knowledge institutes and customers on

developing the current LOFT™ products. It

draws on our own in-house expertise and our

partner’s insights and network so as to meet

an industry demand for greater creativity

and flexibility in using internet as a medium,

and for technologies that boost customer

revenue.

Dynamics PerspectiveDynamics Perspective provides integrated

product life cycle (PLM) solutions for the

textile & apparel industry. Its tools facilitate

creativity, speed to market, and operational

excellence for thousands of clients worldwide

in almost every segment of the trade,

including vertical producers (fiber to finished

garment) and importers of apparel, footwear,

textile, home furnishings, outdoor and fashion

accessories.

Dynamics Perspective boasts a worldwide

presence with local focus, assuring clients

the security of knowing their local and global

needs will be met. Its suite of applications

help organizations optimize activities and

results associated with:

• forecasting

• planning and scheduling

• product development

• production monitoring

• sales and order management

• sourcing

• supply chain

In 2010, Dynamics Perspective underwent a

turnaround in culture and philosophy bringing

it closer to NedSense. Collaboration between

the two companies has intensified with

Dynamics Perspective rationalizing its product

range and developing a new focus on product

life cycle solutions servicing both the DPI and

NedSense client base.


P014

Facebook, TomTom, Twitter, Google Earth,

Wii, Alternate Reality Games. There is an ever

increasing list of ways in which we merge

reality with virtuality on an almost daily basis.

As consumers, we’re growing to expect ex-

periences that merge the here and now with

virtual dimensions, whether it’s trying out new

fashion styles online by uploading a photo or

being guided round an exhibition. The expe-

riences can transform our behavior in such a

way that they can affect a decision about a

purchase or investment.

For many years, economists have focused on

three economic values, namely commodities,

goods and services. According to B. Joseph

Pine in his book The Experience Economy, as

our society, particularly in the developed mar-

kets, has transcended into a more mature and

affluent economy, we have added two new

dimensions: experiences and transformations.

With each step of development, there has

been an increase in the level of customization

and therefore in the level of personal experi-

ence involved. This has created two important

economic values, one in which the price is no

longer set by the cost of the commodities and

labor but by the perceived value, and a second

in which the more lasting and impactful the

experience, the more the customer binds with

the product.

As customers have become aware of the new

economic reality, they have also demanded

more customization; in many ways they have

changed faster than the companies serving

them. Both consumers and businesses have

gained more access to channels, and a wider

variety of technology. They have become

researchers, developers and designers of

their own experiences. Hopping from a high

street store to the internet and on to a contact

center through a range of devices, customers

subconsciously rate their experience on cost-

benefit, usability, time consumption, and so

on. To add to the complexity, the range of in-

fluencers has also increased. Where first only

the personal network was referred to during

decision making, customers now also turn to

Google intelligence, social network commu-

nities, comparison sites, and the like. In ad-

dition, the devices themselves, from desktop

to Smartphone and iPad are adding an extra

dimension to channels. As they become more

converged, networked and location-aware,

they further break down the barriers between

the real and the virtual world.

NedSense technology – merging reality with virtuality

Enabling consumers to make guided decisions

about their investments


P015

B. Joseph Pine II, co-author of the Experience Economy, e.g.:

“�Those�companies�that�wish�to�offer�their�customers�an�experience�need�to�see�themselves�as�stagers�of�events”

NedSense innovations, and particularly the

LOFT™ products, are a response to these

changes, enabling customers to experience

what their home or office interior will look like

before an order or even a decision is made.

An original environment such as a picture of

a room is injected into a virtual space in order

to create a real and visible experience, for

instance, displaying the customer’s room with

the designer’s flooring, wall paper, furniture

and fabrics. The customer is then able to make

a guided decision based on how they experi-

ence this virtual space and then, by placing an

order, make it a reality.

Commodities make Goods which deliver Services that stage Experiences which guide Transformations


004 Composition of the BoardsBoard of Directors

Pieter Aarts (1967, Dutch, male), Chairman of the Board of Directors (since January 2009)Mr. Aarts graduated from the Technical

University Eindhoven (NL) in 1989 before

obtaining a Master in Business Administration

from Kingston University in London (UK). He

started his professional career in 1989 with

one of the PinkRoccade Group subsidiaries

as a consultant in logistics. In 1994, Mr. Aarts

was made Managing Director of PinkRoccade

Industry, and continued in various Managing

and Executive positions, including member of

the Board of Directors, within PinkRoccade

until 2004. He then moved to Hewlett-Packard

Netherlands as member of the Board of

Directors before continuing as an interim

manager for companies such as Inter Access

and Ordina. Since 2002, Mr. Aarts has held a

number of advisory management positions

with a variety of organizations, mainly in the

ICT industry.

Jan-Hein Pullens (1972, Dutch, male), Member of the Board of Directors (since January 2009)Mr. Pullens graduated from the Faculty of

Economics and Management at the University

of Applied Sciences in Utrecht in 1997 having

already started his professional career in the

previous year as an Account Manager in the

software industry. He was then recruited by

Unisys Netherlands where he held various

management and sales executive positions

within Unisys’ Global Industry and Global

Infrastructure divisions. In 2004, Mr. Pullens

became Division Director for Outsourcing at

Inter Access, where he led the development

and growth of this new division. Three years

later, in 2007, he joined Hewlett-Packard’s

EMEA Strategic Outsourcing team as an

Engagement Lead focusing on the large

international IT outsourcing deals. Since

2005, Mr. Pullens has held various advisory

management positions with a number of

organizations.

Supervisory Board

Mr. Servaas l.M. Houtakkers (1959, Dutch, male), Chairman Supervisory Board (since August 2005)Mr. Houtakkers graduated from Nijmegen

University and started his professional

career as a corporate lawyer at Hendrix

International, now better known as Nutreco

NV, before moving to the legal department

of MeesPierson NV in Amsterdam. In the

early 1990s, he pioneered the banking and

trust activities of MeesPierson in Belgium,

before being appointed Managing Director

of MeesPierson Trust Luxembourg in 1994,

and subsequently Managing Director of

MeesPierson (Luxembourg) Banquiers.

After a brief appointment as Chief Operating

Officer of EASDAQ NV/SA, he returned to

Amsterdam in 1998 to continue his career at

Merrill Lynch NV. In 2001, he was appointed


managing partner with a Brussels-based

corporate services company. In 2003 he

became managing partner of TMF (Belgium)

N.V. Mr. Houtakkers has been active as a

corporate consultant since January 2005. He

is a member of the advisory board of Greening

International Partners and was a member

of the managing board of Burani Designer

Holding BV until February 2007. He was

Chairman of the Board of Directors of Prolion

Holding NV from 2002 until September 2004,

and of Interbanca International Holding SA

from 2003 until March 2005. As from

May 1, 2011 onwards Mr. Houtakkers will

serve as chairman of the supervisory board

of IS Interned Services B.V.

Mr. Henk Huisman (1944, Dutch, male), Member Supervisory Board (since May 2009) Mr. Huisman worked from the mid-sixties

until his retirement in 2002 in the IT industry,

fulfilling several positions at management level

within Dutch and international companies.

During the last ten years before his retirement,

Mr. Huisman was a member of the Executive

Board of PinkRoccade. Mr. Huisman is a

member of the Advisory Boards of several

companies in the IT and Telecom business,

and also active as a strategic consultant in

M & A projects.

Mr. Dirk lindenbergh (1949, Dutch, male), Member Supervisory Board (since January 2009)Mr. Lindenbergh has been an entrepreneur

throughout his career, founding an

international operating business in the gaming

industry which he later, in 2000, sold to ABN

Amro equity and NPM Capital. He continued

as board member for the newly formed

company for another six years.

Mr. Lindenbergh studied philosophy part-

time at Groningen University, and Business

Valuation at Erasmus University Rotterdam. He

is also a graduate in Business Administration

from Nyenrode University. In 2004, he

followed the Advanced Management Program

at Nyenrode University and returned in 2005

to follow a strategic course for non-executive

board members. He has been a member

of the boards of Docdata N.V. since 2006,

Midlin N.V. since 2007, and Astor Participaties

(Private Equity) since 2008. In 2009 he joined

the non-executive board of BE Semiconductor

Industries N.V., and in 2010 he joined the non-

executive board of DPA Group N.V.

005 Report of the Board of directors



The NedSense strategy

The name NedSense enterprises n.v. legally

came into force in January 2010. Signaling

the end of an era as Blue Fox Enterprises NV,

the name change underlined the strategic

direction and invigorating corporate culture

embraced in 2009. The success achieved

by the continuation of this strategy over the

past year will enable us to further build on our

value triangle of revenue growth, performance

improvement, market deployment, and

sustainability.

In 2010, the American textile and apparel

market was recovering well from the effects

of the economic crisis. Although the European

market was still struggling to emerge from the

recession, NedSense has fared competently

in both markets with the company breaking

even, excluding the additional investments

005 Report of the Board of Directors

Critical analysis helped us recognize the full potential of our products and people

Highlights- Official rebranding of holding name to NedSense enterprises n.v.

- Issuance of new stock and renegotiation of financier’s loan

- Modification of production process to distinguish product development from product

manufacture and increase speed of time to market

- Upgrading of software security system to fight piracy

- Turnaround of Dynamics Perspective so as to fuse with NedSense philosophy

- Development of alliances to augment status of networked organization

- Gain in market share and of major deals in US

- Attainment of break-even excluding additional investments in LOFT across the board by

year end


made in LOFT, across the board at year end.

Phases 1 and 2 of the value triangle business

plan had quickly borne fruit in 2009, enabling

us to focus on phase 3 of the plan in 2010.

The transition phase of 2009 was fast-paced

and comprehensive, and has resulted in a

company mentality that is far more pro-active

and aggressive. During the first phase of

the value triangle, we focused on creating

sustainability in the company, partly by

reviving our sales and marketing efforts and

intensifying customer loyalty. In the second

phase, we built on the newly strengthened

foundations and shifted focus to structural

performance improvement, revenue growth,

and market development. An organizational

change coupled with a critical analysis of our

strengths and weaknesses, our markets, and

our opportunities enabled us to recognize

ways in which we could use the full potential

of our products and people, and took us into

the third phase of the value triangle.

Value triangle phase 3The third phase of the value triangle business

plan aims to see NedSense expand within

and beyond our current markets, and invent,

dictate and define the direction in which we

are going. It is a phase that transcends 2010

simply by the nature of its goals. Expanding

market share and conquering new markets

are longer term objectives, and as our society

is continually developing and changing, so

will our direction also need to be modified

accordingly. One aspect of inventing, dictating

and defining the direction in which we are

going has concerned the name change to

NedSense enterprises n.v. The subsequent

rebranding process has been initiated with a

new logo and website being the most visual

developments so far.

One of the major changes in 2010 concerned

the production process. As part of a moderni-

zation program, product management has

been separated from product development,

allowing each area to focus on applying their

knowledge and skills specifically. At NedSense,

our intellectual property is our knowledge of the

markets, its processes and its business rules.

We now outsource part of the actual building

of the software to our product development

partners. The result is not only a shorter time-

to-market and higher quality software, but also

an increased agility to respond and appeal to

market needs, and improved efficiency in the

Our intellectual property is our product and market knowledge


production process overall. As our intellectual

property is our competitive edge, improved

software encryption technologies were rolled

out in 2010 as a means to combat piracy.

Building on the trend set in 2009, NedSense

continued to reach out to partners in the

market. The transformation of the company

into a networked organization enables us

to draw on the expertise and resources of

partner institutions, including universities, as

well as create an ambassador network that

recommends our products in the market. Our

alliances with PTC and Adobe have enabled us

to further develop our strategy of optimizing

our product and services portfolio.

In June of 2010, an agreement was reached

with our major shareholders on a private

issuance of shares, and the credit facility

was renegotiated with the company’s

financier. This stronger capital structure

is required to finance and facilitate the

strategic growth plan to bring the LOFT

start-up division to its full potential.

NedSense agreed a share price of € 0.40

per share for the issuance in order to obtain

extra capital of € 1.5 million.

NedSense and its financier agreed that

NedSense would cancel the option to

convert a portion of the outstanding loan of

€ 2.1 million into NedSense shares. The

loan is now repayable in install ments with

€ 0.5 million to be repaid by 1 January 2012,

€ 1 million by 1 January 2013, and

€ 0.6 million by 31 December 2013.

Financing will continue to be one of our top

priorities in 2011. The expected operational

cash flows are not sufficient to redeem the

first installment of the debt. Discussions are

currently ongoing with potential investors

who appear to be willing to fund the growth

strategy of the Company.

NedGraphics

The value triangle growth strategy reaped

rewards in 2010 with NedGraphics emerging

from the recession stronger and with

better results. The current applications

NedGraphics recorded positive results over 2010


from NedGraphics continue to be the most

widely used in the industry today, and 2010

has proved to be an exceptional year. The

challenging economic climate has meant that

many companies have been reassessing the

value offered by their existing technologies

to determine if they are in line with industry

best practices.The pro-active culture

developed within NedGraphics has paid off

and a number of major deals have been

closed in the US market. By differentiating

our product offering and providing a high level

of customer friendly support, NedGraphics

has successfully gained market share from its

competition. Many of these companies opting

for the technology upgrades are first time

NedGraphics users, and have migrated from

using alternative CAD technology offerings.

The majority of the new customers are some

of the most well known brands in the retail,

apparel and home fashions markets, and are

listed on the Fortune 500.

In 2010, NedGraphics launched its virtual

sampling solution enabling its customers to

communicate quickly and effectively with

prospects by displaying digital samples directly

on screen. The solution is a clear response

to the current major market trend of greatly

reducing time-to-market of new collections. It

not only accelerates the production process,

but also reduces sampling costs, optimizes

relationships and communication with

prospects, and reduces response time.

We are committed

to developing unparalleled personalized experiences


Dynamics Perspective

The organizational gap that had developed

over the years between NedSense and

Dynamics Perspective Inc (DPI) has been

effectively diminished over the past year. In

the first half of 2010, NedSense enterprises

n.v. examined DPI’s positioning and assessed

its strengths and shortcomings. The

knowledge and experience built up within DPI

has been recognized and reapplied through

product rationalization and focus. On an

organizational level, the company has been

right-sized. Staff have been empowered and

have become more proactive as a result,

accepting accountability for their decisions and

actions.

The turnaround in culture and philosophy has

brought DPI closer to its NedSense base.

Collaboration between the two companies

has intensified with DPI developing a new

focus on product life cycle solutions servicing

both the DPI and NedSense client base.

In keeping with NedSense’s concept of a

networked organization, DPI has also entered

into new alliances to provide a robust concept-

to-counter product management suite of

solutions.

LOFT

In the first quarter of 2010, the research and

development team has been reformed to

include the team members involved in the

inception phase of the LOFT™ products.

This reorganization was fully in line with the

importance NedSense places on recognizing

knowledge and expertise. Throughout the

year, LOFT has benefited from external

sounding boards as it continues through

an open innovation stage of development.

Partnerships created in 2010 with Rubelli and

Donghia, as well as the adoption of the Apple

platform illustrate LOFT™’s commitment

to developing unparalleled personalized

experiences.

The NedSense nameIn December 2008, Blue Fox Enterprises N.V. embarked on a new strategic direction, combining the

strengths of the company with a drive for innovation. We felt a name change would underline our

commitment to this new strategy, and strengthen our position in the textile and apparel market. As

NedSense enterprises n.v., we maintain the name recognition and reputation our core business entity

NedGraphics enjoys in the market, and illustrate our aim to offer solutions that truly make sense to our

customers. NedSense enterprises n.v. will serve as the umbrella brand for all company activities.


Evolution

NedSense is confident that prolongation

of the current strategy will continue to

generate revenue growth. We have achieved

a commendable level of stability over a short

period and are ready to enter a new more

aggressive phase of development. In the

coming year, we will continue to build on

the company’s strengths, and expand and

maximize market leadership. This will include

building market share in emerging markets

such as Brazil and China.

The initial concept of a networked organization

for research and development purposes has

matured into a networked organization across

the board, partnering for instance at a sales

level with companies which might ordinarily be

competition. We will continue to foster these

alliances, so as broaden our sales base and

marketing channels.

We want to continue to build on our

knowledge heritage and cultivate relevant

partnerships, so that we can innovate and

lead, and create real economic value for our

customers.

Pieter AartsJan-Hein Pullens

Vianen, April 25, 2011

The NedSense philosophy Experience your designOur company knowledge revolves

around means of merging

reality and virtuality to create

software platforms that create

real economic value for our

customers. No matter how real

the virtuality in software may

appear, we maintain a pragmatic

nature as a company with

both feet truly on the ground.

By listening carefully to our

customer’s needs, we can provide

solutions that make sense and

create tangible value.


Financial resultsNedSense ended 2010 with a net loss of

€ 0.73 million (2009: € 1.68 million loss).

The improved result of 2010 was mainly

due to the successful implementation of the

Value Triangle Strategy initiated in 2009, and

improved economic conditions. The operating

result for 2010 amounted to € 0.36 million

negative (2009: € 1.57 million negative).

Activities include the CAD CAM activities

of NedGraphics and the ERP activities of

Dynamics Perspective. The net revenue of

NedGraphics increased by 17.3%, to

€ 8.6 million (2009: € 7.35 million) driven by a

43.2% increase in software sales as a result of

the company’s new go-to-market strategy and

improved economic conditions. The higher

revenue had an immediate impact on the

operating result, which increased from a loss

of € 0.10 million in 2009 to a profit of € 1.12

million in 2010. The revenue from the ERP

activities of Dynamics Perspective increased

from € 0.76 million in 2009 to € 0.80 million

in 2010. The operating result of Dynamics

Perspective increased from a loss of € 0.14

million in 2009 to breakeven in 2010. Other

activities include the holding company and

LOFT. Operating expenses increased from

€ 1.09 million in 2009 to € 1.73 million in 2010

including € 0.75 million in expenses for LOFT

(2009: € 0.23 million), and € 0.22 million for

share-based, equity settled payments (2009:

€ 0.05 million).

Cash flow, investments, financingThe operational cash flow in 2010 amounted

to € 1.25 million positive (2009: € 0.06 million

negative). The increase from 2009 was mainly

due to the improved operating result.

The cash flow from investments in 2010 was

€ 2.34 million negative (2009: € 1.93 million

negative). The decline in 2010 was mainly

due to the investments made in the software

development of the new LOFT™ product line.

The cash flow from financing in 2010 was

€ 1.39 million positive (2009: € 1.02 million

positive). The total change in cash and cash

equivalents in 2010 amounted to € 0.31 million

positive (2009: € 0.97 million negative).

Balance sheetFrom 31 December 2009, fixed assets

increased from € 8.64 million to € 9.25 million

as of 31 December 2010. This was mainly due

to the capitalization of developed software for

the new LOFT™ product line.

Due to the negative results in the past

few years, NedSense has losses that may

be carried forward. These tax assets are

not capitalized in the balance sheet as

management is currently not certain that

sufficient taxable profits will be made in the

Financial results 2010Report by the Board of Directors – Financial Information 2010


near future to realize the value of these tax

assets.

Shareholders’ equity increased from

€ 4.32 million as of 31 December 2009 to

€ 5.13 million as of December 31, 2010. This

€ 0.81 million increase was mainly caused by

the issue of new shares in the net amount of

€ 1.39 million, the net loss in 2010 of

€ 0.73 million, and the € 0.22 million for

share-based, equity settled payments. As a

result of these changes, solvency increased to

36.9% at December 31, 2010, from 34.1% at

December 31, 2009.

The number of outstanding ordinary shares,

with a nominal value of € 0.10 each, was

13,581,343 as of December 31, 2010. Please

see the accompanying financial statements

and the notes to those statements for

additional information.


006 Report of the Supervisory Board


This annual report includes the financial

statements for the financial year 2010 as

prepared by the Board of Directors and

adopted by the Supervisory Board, as well

as other information concerning NedSense

enterprises n.v.

Composition of the Supervisory Board

The Company’s Articles of Association

stipulate that the Supervisory Board must be

composed of a minimum of two members.

Currently the Supervisory Board comprises

three members and, as such, is able to cover

the further growth of the company. Each

member of the Supervisory Board has a

broad range of experience and expertise in

the various disciplines encountered by the

company in its current stage of development

and strategy.

The members of the Supervisory Board

correspond with the required profiles of

Supervisory Board members. Detailed profiles

of the Supervisory Board members can be

found on the company’s website www.

nedsense.com.

Terms of referenceA member of the Supervisory Board will not be

available for appointment or reappointment if that

member has already served three consecutive

periods of 3 years as a board member.

A supervisory director will retire according to

the following schedule:

Year Term elected endMr. Servaas L.M Houtakkers 2005 2011

Mr. Dirk Lindenbergh 2009 2012

Mr. Henk Huisman 2009 2012

At the next annual AGM the second term of

Mr. Servaas Houtakkers will expire. He has

been acting as Chairman of the Company

since the AGM of May 2005. The Supervisory

Board proposes to reappoint Mr. Houtakkers

for a final three-year term.

The NedSense Supervisory Board terms

of reference set the regulations for the

Supervisory Board regarding its duties and

responsibilities. The regulations are designed

to ensure that NedSense is operated and

managed in a manner consistent with the best

interests of the company and the best interests

of its shareholders and other stakeholders.

The NedSense Supervisory Board regulations

stipulate, amongst others, that:

• The role of the Supervisory Board is

to supervise the policies of the Board

of Directors and the general affairs of

NedSense.

• Members of the Supervisory Board have full

and free access to NedSense management

006 Report of the Supervisory Board 2010


and, if necessary and appropriate,

independent advisors.

The Supervisory Board attaches great

importance to the independence of its

members. As a rule, all members, with the

exception of no more than one, should be

independent in the meaning of provision III.2.1

of the Dutch Corporate Governance Code.

With the exception of Dirk Lindenbergh, who

through Blikkenburg B.V. holds more than 10%

of all outstanding shares in the company, the

Supervisory Board members are independent.

The members of the Supervisory Board were

not granted and do not possess any NedSense

options or shares, with the exception of Dirk

Lindenbergh. During a separate meeting,

the Supervisory Board discussed its own

performance, its composition and the need

to create committees. Items assessed and

discussed included: (i) the Board’s size, profile,

mix of skills and experience; (ii) meeting

frequency, decision-making, follow-up of and

discussion during meetings; (iii) performance;

(iv) the relationship with the Board of

Directors; and (v), the performance of the

Chairman. The Supervisory Board concluded

that all of these items were unanimously

assessed positively. The Supervisory Board

Chairman also conducted one-to-one meetings

with each individual board member to discuss

his or her own functioning and the functioning

of the board on the whole.


Supervision in 2010

The Supervisory Board and the Board of

Directors met ten times during 2010. In

addition, there have been formal telephone

conferences and various informal contacts,

both between the Supervisory Board and the

Board of Directors and between the members

of the Supervisory Board. Three formal

meetings were held amongst the Supervisory

Board members themselves. These meetings

were held to discuss the review of the

remuneration policy, the remuneration of the

Board of Directors and incentives for key staff

members. The external auditor was invited

to two meetings to discuss the preparations

and results of the annual report and accounts.

None of the Supervisory Board members were

regularly absent during 2010.

During the joint meetings and calls with the

Board of Directors, the Supervisory Board

was updated regarding market developments

in the main countries NedSense is operating

in, product development, company

reorganization and performance plans.

Strategy was placed at the top of the agenda

during a number of meetings, so enabling the

Supervisory Board members to participate

in the discussion on the future scope of the

company. Considerable time was spent on

in-depth discussions of the overall strategy

of the company within its competitive

environment. Due to this competitive

environment, it is inappropriate to expand in

detail on the topics discussed.

Recurring items on the agenda included:• The financial performance of the company

as a whole, and key issues per operating

company

• The balance sheet, profit & loss account, and

the cash position of the company

• Business performance, including new

projects and potential divestments

• Operational changes in the organization

• Potential strategic alliances

• General risks associated with the operations

of the company

• Assessment and review of the structure

and operation of the company’s subsidiaries

NedGraphics b.v. in the Netherlands, and DPI

Inc. in the USA

• The performance and internal division of

tasks of the Board of Directors

• Composition of the Supervisory Board

• Analyst and investor views, and contact with

financial parties

• Developments related to corporate

governance

• The preparation and evaluation of the AGM

The Supervisory Board further underlines

the importance of the possibility of reporting

internal misconduct and related internal

procedures, and shares responsibility for these

issues with the Board of Directors.

The Chairman of the Supervisory Board and the

members of the company’s Board of Directors

met on a regular basis and had frequent contact

during the year. The year 2009 was a year

of change, and 2010 was characterized by


further building on the new organization, the

rebranding, the boost of the US activities, and

further development of LOFT.

The financing of the working capital and the

company´s liquidity continued, as they were in

2009, to appear on the agenda in 2010. During

the Extraordinary Meeting of Shareholders on

June 30, 2010, a subsequent private issuance

of shares from the company to its major

shareholders was approved. Simultaneously,

the financier of the company agreed to further

extend the term of the credit facility, and as

such provided the company with more room

to focus on the development of its business.

The further development and go-to-market of

LOFT™ were partly financed by this emission.

This latest emission opened a new discussion

with respect to the consequences for the

remuneration policy of the company as agreed

by the Board of Directors and the Supervisory

Board, and approved at the AGM of May 26,

2009.

Committees of the Supervisory Board

Under the Dutch Corporate Governance Code,

it is usual for the Supervisory Board to appoint

a number of permanent committees. Due to

the size of the company and the limited number

of members of the Supervisory Board it was

decided not to delegate tasks but to carry

out the task related to the Audit Committee,

Remuneration Committee and the Selection &

Nomination Committee in collegiality.

Audit Committee

In 2010, the Audit Committee consisted

of the entire Supervisory Board. The Audit

Committee controls and assesses the financial

reporting processes of the company, as well

as the expert investigation carried out by the

external auditor. Two meetings were held with

the external auditor KPMG Accountants N.V.

to discuss the preparation and the content of

the financial report.

The main topics discussed at those mee-tings in 2010 included:• the financial performance of the company

as a whole, which were discussed every

6 months and focused on the quality of

earnings, productivity, the balance sheet,

financing, provisions and taxes, impairments

and the outlook for the subsequent period

• the auditor’s report, as well as the follow-up

of their management letter, client service

plan, audit planning and fees

• a review of fiscal, treasury (including

financing policy), and legal developments as

provided by the Board of Directors

• the performance review of the finance

function and its key people

Excepting January and July, the internal

financial reports were presented and

discussed on a monthly basis with the Board

of Directors.


External Auditor

KPMG, represented by its partner Frank van

het Kaar, acted as auditor of the company.

Its nomination was approved by the Annual

General Meeting of Shareholders on May 25,

2010. The Supervisory Board wishes to thank

KPMG Accountants N.V. for its constructive

contributions and work in 2010.

Remuneration Policy

The Supervisory Board sets the level of

remuneration for the Board of Directors in

line with the approved remuneration policy.

Remuneration for the Chairman and other

members of the Supervisory Board is set by

the Annual General Meeting of Shareholders.

The main objective of the remuneration policy is

to attract and retain qualified managers against

market conditions for an international listed

company with activities in the field of software

development. The remuneration policy 2009-

2011 is published on the company’s website.

The remuneration policy aims to provide the

members of the Board of Directors, both jointly

and individually, and certain, yet to be confirmed,

key employees of NedSense enterprises n.v.

with a level of compensation that:

• Aligns performance with the financial targets

and the strategy of NedSense and its

subsidiaries

• Attracts and retains top managers as

management of NedSense enterprises n.v.

The remuneration policy for the members of the NedSense Board of Directors has four elements: • Base salary (including pension scheme)

• Variable income

• Long term incentive plan

• Secondary employment conditions

The long term incentive plan comprises an

option plan for the members of the Board of

Directors and key employees. Assuming 30%

of the outstanding shares between 2009 and

2011 are granted to the Board of Directors and

key employees in the form of share options,

two-thirds of this 30% will be given to the

Board of Directors as a bonus based on the

principles of their variable income scheme.

The Board of Directors will receive an options

package granting them the right to 20% of

NedSense outstanding share capital following

the conversion of the convertible loan of

EUR 850,000 issued in December 2008. The

options package will be distributed equally

amongst the Board of Directors and issued by

NedSense on the day the Board of Directors

takes up its duties.

A maximum of 10% of the outstanding shares

will be granted to the Board of Directors and

those NedSense employees that have had a

particular effect on the company’s strategy

and its implementation (in other words key

personnel) in 2009, 2010 and 2011 provided

the criteria are attained. The Supervisory

Board will grant the options to the Board of


Directors, and the Board of Directors will grant

options to key personnel on the Supervisory

Board’s approval.

A detailed report of the remuneration policy

can be found on the company website

www.nedsense.com.

Remuneration ReportIn 2010, the Supervisory Board applied the

remuneration policy 2009-2011 as follows:

Base salary The base salary for the members of the Board

of Directors of NedSense enterprises n.v. was

set in 2009 for a period of 3 years, ending on

December 31, 2011. There were no increases

in base salary levels for 2010. Specific figures

are provided on page 136.

Variable incomeVariable income comprises two components,

namely a bonus and share options. For the

period 2009-2011, the Board of Directors is

entitled to a maximum of 20% of the number

of outstanding shares following the emission

in 2008 that was exercised in 2009. In

concrete terms, this 20% is divided into four

phases, as represented in Option Plan C.

The first phase of the Option Plan, a granting

of 5% of the outstanding shares, was to be

exercised following the realization of the 100-

day plan. This was paid out on June 30, 2009.

The second phase concerning 5% of the

shares granted as of December 31, 2009, was

on provision of a number of defined criteria,

namely the Company’s EBIT, certain individual

objectives and an allowance awarded at

the Supervisory Board’s discretion. The

Supervisory Board has granted 2.5%, i.e. 50%,

on the basis of the individual objectives and

discretionary allowance.

The planned granting of 10% as of December

31, 2009 was not exercised. This is not a

reflection of the efforts made by the Board of

Management, but a reflection of the market

the Company is currently operating in. External

factors have meant that, objectively, there

are only 50% of the shares to be granted.

The individual objectives concerning the

organization, the launch of LOFT, finance

and reporting were all attained in 2009, and

the members of the Supervisory Board are

fully aware of the conditions under which

these objectives were attained. As such, the

Supervisory Board calls on its right to award

the discretionary allowance in full.

The objectives for 2010 that were set for

the Board of Management as conditions for

receiving further options to a maximum of 5%

of the outstanding shares are related to:

• The EBIT level and profitability of the

Company. For this purpose, the EBIT level

excludes investments in LOFT. The objective

was for the Company to achieve operational

break-even.

• The further streamlining of management

within the Company, particularly regarding

the position of second line management and

the development of an incentive plan, namely


Plan D. This formed the strategy aspect of

the objective. The tactical aspect concerned

the further financing and refinancing of the

current line of credit, while the operational

aspect of the objective focused on the

working and interpretation of the financial

department and the monthly reports.

Individual objectives were set concerning

LOFT, with particular attention being placed

on the go-to-market activities, the launch in

the American market and the integration of

the product development units.

In addition to the criteria listed above, the

Supervisory Board may use its authority to

grant share options at its own discretion.

Based on the achievements of the members

of the Board of Directors, the Supervisory

Board has concluded that the above criteria

have been achieved to 92.5%, which therefore

entitles a granting of share options as stated

in Plan C to the value of 4.63% of the defined

number of outstanding shares.

long-term incentive planA number of conditional share options have

been granted to the members of the Board

of Directors and key staff based on the

Policy’s Option Plan D. These options become

unconditional (i.e. vest) after three years,

depending on certain market-related criteria. In

the period 2012-2014, the share value

must be at least €0.90-€1.10 at any given

moment. This is linked to a sliding scale.

The liquidity of NedSense shares in the

stock market is minimal; NedSense shares

are sensitive to the sentiment of the day.

If the criteria are not met when the price is

set, granting may be retracted. Therefore,

in contrast to Plan C, Plan D is linked to the

level of a previously determined fair price for

NedSense enterprises n.v. shares.

Secondary employment conditionsThe pension arrangements for members of

the Board of Directors are based on a defined

contribution plan and are managed by an

insurance company. Details of this plan are

provided on pages 123 and 136 of this annual

report. Additional arrangements include

expense allowances, a company car and

accident insurance.

The company has issued no loans or

guarantees to members of the Board of

Directors.

AdjustmentsAccording to the Governance Code, if a

variable remuneration component conditionally

awarded in a previous financial year would,

in the opinion of the Supervisory Board,

produce an unfair result due to extraordinary

circumstances during the period in which the

predetermined performance criteria have been

or should have been achieved, the Supervisory

Board has the power to adjust the value

downwards or upwards.

During the summer of 2010, extensive

discussions took place between the members


of the Supervisory Board and the Board

of Directors concerning the feasibility and

fairness of the Remuneration Policy 2009-

2011, particular regarding Plans C and D.

When this policy was drawn up in 2008 and

2009, consideration was made of both the

Company’s financial situation and the policy’s

capacity to attract qualified management.

It was resolutely agreed with the current

management that a fixed salary would be set

at a reasonable level and with the incentive to

take on the management task at hand created

primarily in the form of Plan C in which they

would be able to acquire 20% of NedSense

share capital. The exercise price was set at

€ 0.64. The exercise price was not a criteria

but a random indication. The Supervisory

Board has become aware that sustaining

this exercise price impairs the initial purpose

and wishes to use its right to implement a

one-off correction regarding the level of the

exercise price. A second potential problem in

this respect concerns the anti dilution clause.

At the time when the employment contracts

were signed and the option plans agreed

upon, it could not have been anticipated

that there would be extra issuances in 2009

and 2010. In order to deal with both these

problems, the Supervisory Board has decided

to decrease the exercise price to € 0.40, thus bringing it in line with the level of the issue

price applied in January 2009. The positive

and negative effects of this decision for the

Company practically cancel each other out,

whereas the consequences bring it more

in line with the initial purpose for which the

arrangement had been agreed at the end of

2008 with the current management.

This was communicated on September 8,

2010 to the members of the Board of Directors

and is recorded in the minutes of the joint

meeting of the Supervisory Board and the

Board of Directors of October 26, 2010.

Selection and nominationPieter Aarts and Jan-Hein Pullens were

elected members of the Board of Directors as

of January 1, 2009, for a period of four years.

Remuneration of the Board of Directors in 2011

No changes will be made in 2011 to the

remuneration policy as described above for

members of the Board of Directors, and their

base salary will not be adjusted.

Remuneration of the Supervisory Board in 2011

The Annual General Meeting of Shareholders

determines the remuneration of the members

of the Supervisory Board. Remuneration

has remained unchanged since 2005 and

will not change in 2011. The remuneration

of the members of the Supervisory Board

consists of one component only, being a

fixed cash payment, and is not linked to

any financial or operational performance of


NedSense. In addition to this fixed payment,

the members of the Supervisory Board receive

a monthly expense allowance. Details of

the remuneration of the Supervisory Board

members are listed on page 136 of this report.

Members of the Supervisory Board who have

shares in the company have adhered to the

company’s insider dealing rules.

Remuneration policy 2012-2015The remuneration policy 2012-2015 will be

presented in brief during the Annual General

Meeting of Shareholders on June 7, 2011.

Following approval, further elaboration of the

policy will follow based on the strategy as

determined in the business plan 2011-2015.

Report of the Annual General Meeting of Shareholders May 25, 2010

During the Annual General Meeting of

Shareholders held in Vianen, the members

of the Board of Directors gave extensive

presentations on the financial situation of

NedSense enterprises n.v. and the general

state of affairs of the Company. The 2009

remuneration report was discussed with

shareholders and approved. The 2009 financial

statements were approved and adopted

in the presence of the company’s auditor

KPMG Accountants NV represented by Frank

van het Kaar. The members of the Board of

Directors were granted discharge of liability

for their management and the members of

the Supervisory Board for their supervision

thereof.

The whole meeting was recorded on tape and

the minutes were published on the Company’s

website within 3 months after the meeting.

Financial Statements 2010The Financial Statements 2010 have been

audited and provided with an unqualified

opinion by KPMG Accountants NV (please

see the auditor’s report on page 138) and

were extensively discussed with the auditors

in the meeting of the Supervisory Board and

the Board of Directors on April 19th, 2011.

The Supervisory Board is of the opinion

that the Financial Statements 2010 meet all

requirements for correctness and transparency

and recommends that the Annual General

Meeting of Shareholders adopts the financial

statements and the appropriation of net

income proposed by the Board of Directors.

The financial statements were authorized for

issuance on April 25th, 2011.

The Supervisory Board proposes that the

Annual General Meeting of Shareholders

grants discharge to the members of the Board

of Directors for their management and to the

members of the Supervisory Board for their

supervision in 2010.

In conclusionFollowing two years of reorganization, and

the management of the downturn marked by

the credit crises, which started in 2009 when


the current Board of Directors was appointed,

2010 was a year spent on the constructive

building of a new business model, supported

by the strong performance and improved

results of the existing NedGraphics operations.

The Supervisory Board wishes to express

its thanks to the members of the Board

of Directors for their efforts in getting the

company to where it is today. A new business

model will bring new opportunities. In

addition, the Supervisory Board would like to

explicitly include the employees of NedSense

enterprises n.v. in its thanks. Naturally, a word

of thanks is also extended to our stakeholders

and others who, despite the many setbacks

of the past few years, have continued to

show their faith in the company and its

management.

Servaas Houtakkers (Chairman)Dirk LindenberghHenk Huisman


General

NedSense enterprises n.v. attaches great

importance to corporate governance. In

recent years, we have discussed in detail

the Dutch Code on Corporate Governance.

The Board of Directors and the Supervisory

Board of NedSense endorse the Code and

the amendments made to the code by the

Monitoring Committee that entered into force

on January 1, 2009. Within the framework

of this Code, a company’s stakeholders

include staff members, shareholders

and other providers of capital, financiers,

suppliers, customers, as well as government

authorities, social groups and factions. The

Board of Directors and the Supervisory Board

of NedSense are responsible for striking

a balance between the interests of these

stakeholders, while taking into account the

continuity of the company. Therefore, best

practice principles with regard to corporate

governance are reflected in the management

structure and the company’s Articles of

Association, as far as these are deemed

applicable and are in the interest of all

stakeholders.

Any substantial changes in NedSense’s

corporate governance structure and its

compliance with the code will be submitted to

the Annual General Meeting of Shareholders.

Corporate governance declaration

The NedSense enterprises n.v.’ ordinary

shares are listed on Euronext Amsterdam by

NYSE Euronext. Accordingly, the company

complies with all applicable listing rules of

Euronext Amsterdam.

In accordance with the recommendation of the

Dutch Corporate Governance Code Monitoring

Committee to ‘comply or explain’, NedSense’s

corporate governance practice was placed on

the agenda of the Annual General Meeting

of Shareholders in May 2007, in order to give

shareholders the opportunity to voice their

opinion on the way the company interprets

compliance with the Code. A description

of NedSense Corporate Governance Code,

including the relevant regulations and

reports, can be found on the website www.

nedsense.com. For the application of the

NedSense Code, we follow to the greatest

extent possible the guidance provisions

provided by the Dutch Corporate Governance

Code Monitoring Committee in its reports

on compliance with the Dutch Corporate

Governance Code.


Board, which are jointly responsible for the

corporate governance structure of NedSense,

are of the opinion that the vast majority of

the principles and best practice provisions

of the code are being applied. As the code

is based on the ‘comply or explain’ principle,

007 Corporate Governance


deviations which are deemed necessary in the

interests of NedSense have been explained to

shareholders and are described in this report.

Corporate Governance Structure

Board of DirectorsThe Board of Directors is responsible for the

day-to-day management of the Company,

and is accountable to the Supervisory Board

and to the shareholders of the Company. It

is responsible for ensuring that NedSense

is achieving its operational, strategic and

financial goals, for overseeing our compliance

with all applicable rules and regulations that

govern the Company, for managing the risks

associated with our business activities, and

for ensuring that the Company is properly

capitalized. The Board of Directors informs the

Supervisory Board of internal risk management

and control systems, and any updates or

developments related thereto. Any conflicts

of interest or apparent conflicts of interest

between the Company and members of

the Board of Directors shall be avoided. Any

transaction that would give rise to a conflict of

interest or appearance of a conflict of interest

requires the approval of the Supervisory

Board.

The Board of Directors takes into account

the interests of the Company and its

affiliated enterprises as well as the interests

of NedSense’s shareholders and other

stakeholders when taking decisions about the

operation of the business. The members of

the Board of Directors are required to put the

interests of the Company ahead of their own

interests and to act critically and independently

when carrying out their responsibilities.

The Board of Directors is also charged with

providing the Supervisory Board all material

information required to permit the Supervisory

Board to exercise its duties. The NedSense

Articles of Association provide that certain

resolutions of the Board of Directors require

prior approval of the Supervisory Board.

Pursuant to Dutch law and the Articles of

Association, decisions taken by the Board

of Directors involving a major change in the

Company‘s identity or character are subject

to the approval of the General Meeting of

Shareholders.

The responsibility for the management of the

Company is vested collectively in the Board of

Directors as of January 1, 2009. The members

of the Board of Directors have been appointed

for a term of four years, which is extendable

for a subsequent period of 4 years.

The division of tasks between the board

members requires the approval of the

Supervisory Board. Any board position at

another company requires the prior approval of

the Supervisory Board. In any event, a member

of the Board of Directors may not be a member

of the Supervisory Board of more than two

listed companies or serve as chairman of the

Supervisory Board of another listed company.


Supervisory BoardThe role of the Supervisory Board is to

supervise the Board of Directors and oversee

the general affairs of the Company and its

affiliated enterprises. The Supervisory Board

annually evaluates its own performance.

Supervisory Board members are required

to put the best interests of NedSense

enterprises n.v. ahead of their own interests

and to act critically and independently

when carrying out their responsibilities as

Supervisory Board members. The NedSense

Corporate Governance Code exempts no more

than one Supervisory Board member from

being independent. Each Supervisory Board

member has the expertise required to fulfill

the duties assigned to the role designated to

him within the framework of the Supervisory

Board profile, and the composition of the

Supervisory Board shall be such that it is able

to carry out its duties properly. Appointments

and reappointments to the Supervisory Board

are considered on the basis of a profile,

taking into account the nature of NedSense’s

business and activities as well as the desired

background and expertise of candidates.

Diversity is an important criterion in order

to establish a balance in experience and

background of each member. A Supervisory

Board member shall be reappointed only after

careful consideration.

A member of the Supervisory Board should

limit the number of Supervisory Board

memberships and other positions at listed

and non-listed companies in such a way as

to guarantee the proper performance of his

or her duties, and may not hold more than

five Supervisory Board memberships listed

companies, with a chairmanship counted

twice. Supervisory Board remuneration is

determined by the Annual General Meeting

of Shareholders, and is not dependent on

the company’s results. NedSense ensures

that there are structured reporting lines to

the Supervisory Board, and key departments

and operating companies work according

to reporting frameworks that facilitate

monitoring by both the Board of Directors

and the Supervisory Board. The Supervisory

Board meets regularly throughout the year,

according to a pre-arranged schedule, both

with and without the Board of Directors. In

addition to these meetings, the members

of the Supervisory Board are available to

the Board of Directors at all times. By way

of frequent informal consultation with, and

updates from the members of the Board

of Directors in between meetings, the

Supervisory Board remains well informed

about the general state of affairs within

NedSense and offers advice on a variety

of matters. At the end of each year, the

Supervisory Board extensively assesses the

composition, performance and functioning of

the Board of Directors and the Supervisory

Board, as well as its individual members. The

chairman of the Supervisory Board ensures

the proper functioning of the Supervisory

Board as the main contact for the Board of

Directors.


Any conflicts of interest or apparent conflicts

of interest between the Company and

Supervisory Board members shall be avoided.

The Supervisory Board must approve any

arrangement that would give rise to a conflict

of interest or the appearance of a conflict

of interest, provided that a member of the

Supervisory Board with an interest in such

matter shall not participate in determining

or granting such approval. The Supervisory

Board is responsible for deciding how conflicts

of interest are resolved between members

of the Board of Directors, members of the

Supervisory Board, major shareholders or

the external auditor on the one hand, and the

Company on the other hand.

The Supervisory Board regulations are posted

on our website at www.nedsense.com.

Committees of the Supervisory Board Under the Dutch Corporate Governance Code,

it is usual for the Supervisory Board to appoint

a number of permanent committees. Due

to the size of the company and the limited

number of members of the Supervisory

Board it was decided not to delegate tasks

but to carry out the task related to the Audit

Committee, Remuneration Committee and

the Selection & Nomination Committee in

collegiality.

External Communication

The Board of Directors or the Supervisory

Board provides shareholders and other

parties in the financial markets with equal and

simultaneous information about matters that

may influence the company’s share price.

Contacts between the Board of Directors on

the one hand, and the press and analysts on

the other are carefully handled and structured,

and the Company is prohibited from engaging

in any acts that compromise the independence

of analysts in relation to the Company and vice

versa. If price sensitive information is provided

during a General Meeting of Shareholders or if

a response to a shareholder’s question results

in the disclosure of price-sensitive information,

then such information will be made public

without delay.

Both the Board of Directors and the

Supervisory Board have their own by-laws,

which set rules with regard to objectives,

composition, duties, responsibilities and

working methods. These regulations are

posted on the corporate website. Any

shareholding in the company must be for

the purpose of long-term investment. Board

members must at all times comply with the

provisions contained in the NedSense insider

dealing rules.


Shareholders and the General Meeting of Shareholders

Good corporate governance requires the

full participation of shareholders. It is in

the interest of the Company that as many

shareholders as possible participate in

the Company’s decision-making at the

Annual General Meeting of Shareholders

or at any Extraordinary General Meeting of

Shareholders.


Board shall provide the General Meeting of

Shareholders with the information that it requires

for the exercise of its powers, subject to such

limitations as are allowed under Dutch law.

Pursuant to Dutch law, any decisions taken

by the Board of Directors on a major change

in the identity or character of the Company or

its enterprise shall be subject to the approval

of the General Meeting of Shareholders.

Further details about the proposals that the

Board of Directors or the Supervisory Board

can submit to the meeting, and the procedure

according to which shareholders themselves

(if representing at least 1% of the issued

capital) can submit matters for consideration

by the meeting are specified in the company’s

Articles of Association.

The Annual General Meeting of shareholders,

which is normally held at the end of May, is

recorded on tape. This tape will be used to

produce the minutes of the meeting. The

minutes are posted on the corporate website

within three months after the meeting.

External Audit

The Board of Directors is primarily responsible

for the quality and completeness of publicly

disclosed financial reports. The Supervisory

Board oversees the Board of Directors as it

fulfills this responsibility. The General Meeting

of Shareholders appoints the external auditor

after recommendation for appointment by the

Supervisory Board. The Supervisory Board also

approves the remuneration of the external

auditor and instructions to the external auditor

with respect to non-audit services.

The Board of Directors ensures that the

external auditors can properly perform their

audit work. The Annual General Meeting of

shareholders charges the external auditors

with the task of auditing NedSense’s annual

accounts.

Internal risk management and control systems

The Company’s internal control function plays

an important role in assessing and testing our

internal risk management and control systems.

This function operates under the responsibility

of the Board of Directors, and consists of a

formal framework defining key risks and key


controls over financial reporting. NedSense’s

finance staff carries out internal control

activities and reports its findings to the Audit

Committee.

The Board of Directors is responsible for the

development, implementation and operating

effectiveness of the risk management and

control systems aligned to NedSense business

activities. These systems are designed with a

view to identifying significant risks in a timely

manner and managing them as adequately as

possible. They provide insight with reasonable

assurance of the extent to which strategic,

operational and financial objectives will be

attained, financial reporting is reliable, and

relevant statutory and regulatory requirements

are complied with. These systems have

been developed on the basis of the COSO

framework

For a description of NedSense’s risk

management and risk profile reference is

made to the section ‘Risk & Control’. The

periodic risk assessments and the discussions

with management are an integral part of the

risk management approach. Once a year,

the overall design will be discussed along

with operating effectiveness of existing risk

management and control systems as well as

any significant shortcomings identified, and

improvement measures already implemented

or intended.

The Board of Directors strongly believes that

the existing risk management and control

systems provide reasonable assurance that

the financial reporting does not contain any

errors of material importance, and that the risk

management and control systems relating to

financial reporting risks operated properly in

the year under review.

The external auditor attends meetings of the

Audit Committee of the Supervisory Board,

at which the annual accounts results are

reviewed for subsequent approval by the

Supervisory Board. The external auditor reports

its findings from the audit of the annual

accounts and issues management letters if

required. Furthermore, the external auditor

reports its review of the annual results to the

Board of Directors and the Supervisory Board

at separate meetings.

Decree on Article 10 Information Required Directive on Takeover Bids

Members of the Board of Directors are

appointed, suspended and dismissed by the

Supervisory Board (Articles of Association,

article 13). Members of the Supervisory Board

are appointed by the General Meeting of

Shareholders, suspended by the Supervisory

Board and dismissed by the Enterprise Section

of the Amsterdam Court of Appeal (Articles of

Association, articles 19 and 20). The General

Meeting of Shareholders can effect the

dismissal of the Supervisory Board (Articles

of Association, article 22). Amendments of


the Articles of Association are effected by the

General Meeting of Shareholders (Articles of

Association, article 31.5).

The powers of the Board of Directors

relating to the issue of shares of the

company are set out in article 4 of the

Articles of Association and those relating to

the acquisition by the company of shares in

its own capital are set out in article 6 of the

Articles of Association.

Deviations from the Dutch Corporate Governance Code

NedSense enterprises n.v. complies with the

majority of the main recommendations

Documents

LAM013-NedSense Jaarverslag 2010 · tober 2010. Close partnerships with launching customers Rubelli and Donghia continued to result in innovations for the product, as did our adoption